Thailand
Thailand: Consumer sentiment up again in October
The consumer confidence index (CCI) rose for a third straight month in October, reflecting stronger purchasing power and a brighter economic outlook for the rest of the year, according to the University of the Thai Chamber of Commerce (UTCC).
The government’s shopping tax break should also stimulate spending during the year-end period and drive GDP growth to 3.9% for the full year, the UTCC said.
Vice-president for research Thanavath Phonvichai said the CCI was 76.7 in October, up from 75.0 in September and 74.5 in August.
“The index showed that consumers were more positive about the economy and felt more confident to spend more money and help boost the economy during the year-end period,” he said. “That would lend support to the economy to grow at 3.9% this year.”
Mr Thanavath said positive factors that pushed the CCI to continue rising in October included exports, which rose by 12.2% in September at the same time that the baht ease slightly against the US dollar.
The state welfare scheme, which lets low-income earners buy cheap consumer goods using smart cards, also helped strengthen consumer purchasing power and spurred spending.
Moreover, the lower oil price in October lessened concern about cost of living, while the government announcement a clear schedule for the much-awaited general election by the end of next year, signalling political stability.
Some negative factors weighed on the CCI, however, particularly the recent floods in the Northeast and the South.
Commodity prices remained at a relatively low level, leading consumers in remote areas to worry about earnings and cost of living.
Looking abroad, the persistent tensions between the West and North Korea could disrupt exports.
The CCI is creeping up at a slow rate because consumers doubt that the economy has fully recovered and low commodity prices remain a drag, Mr Thanavath said.
He said the government’s latest tax break is expected to generate 15-20 billion baht in cash circulating in the economy.
“The tax break measure should help push 2017 GDP up 0.1 points to 3.9%,” he said.
Assuming the economy is in recovery mode, 2018 GDP should grow by 4.2% on stronger exports and growing tourism, Mr Thanavath said.
“Exports and tourism should help support the Thai economy to grow by at least 4% next year, or up to 4.2%,” he said.
Source: https://www.bangkokpost.com/business/news/1357879/consumer-sentiment-up-again-in-october